Interview with Harrison Gross, CEO & Co-Founder Innovative Eyewear
Smart glasses developer Innovative Eyewear recently completed a $7.35 million IPO, on the heels of two regulation crowdfunding rounds on StartEngine in 2020 and 2021. We sat down with co-founder and CEO Harrison Gross to dive into the good, the bad, and the ugly of his experience on StartEngine – how he leveraged crowdfunding to refine his product, and eventually prepare to list on the NASDAQ.*
Here’s what he had to say…
Q: In a sentence, could you describe what Innovative Eyewear does?
A: We develop, manufacture, and sell smart eyewear products and companion software. Our goal as a company is to really create the first mass market smart eyewear product that’s suitable for all-day prescription use.
Q: As you know, founders have a lot of options when it comes to where and how to raise capital. Why did you choose to do a regulation crowdfunding round and why did you choose to partner with StartEngine?
A: Absolutely. Our product is a consumer product, not a B2B product. It’s meant for regular eyeglass consumers and crowdfunding was identified early on as a great way to involve consumers in the development of the product – not just in helping fund it, but also really informing the use cases, the feature set, and styles of glasses. So, it was a useful exercise and about 4,000 people joined our first StartEngine campaign.
They really contributed to the development of the product in numerous ways – from funding the actual R&D, to participating in surveys and focus groups on different styles of glasses. This informed our manufacturing and overall direction. It was an all-around great experience that helped us develop this product, which is in a new category. There wasn’t a whole lot to go on out there in terms of what direction we should take the product in. The main impetus for doing a crowdfunding campaign was to build a community around what we were doing and use that community’s insights to build a better product.
Q: You mentioned involving your community investors in some of the R&D. How did you collect info from the investors and how did that relationship develop?
A: As part of the campaign, we offered a free pair of glasses to anyone who invested $500 or more, so many of the people that participated in the campaign received the product once it was available. This allowed us to gather a lot of information based on those initial deployments from the free pairs that we gave out as part of the crowdfund. It was a useful tactic to get the glasses into hundreds of people’s hands immediately after the product was available.
Q: Can you speak a little about your experience working with the StartEngine team?
A: The awesome landing page we put together with StartEngine gave us our first true investment vehicle for people to come and join our mission. This made microcap investments very digestible and appealing to the average retail investor.
StartEngine, among all the crowdfunding platforms we evaluated, was the best at productizing the investment opportunity and turning it into an attractive, digestible package. Someone could spend 20-30 minutes going through the landing page, reading some of the filings, and have a solid grasp of what the company is all about – where we’re going and what we’re doing. The platform tied together the team, the tech, and the story, which I believe are the three most important things when it comes to a crowdfund. StartEngine, in our view, does this better than anyone else.
Q: As you know, launching a regulation crowdfunding offer is still a substantial undertaking. Could you elaborate more on that?
A: There are benefits and caveats to consider. As you said, it is a heavy lift. It requires significant team resources to manage and start a campaign – to create it, market it, and respond to comments. On the other hand, there’s a major benefit in that the advertising for your crowdfund also attracts regular customers to your product. So, the ad dollars you’re spending to drive traffic to your campaign count double, especially if you have a live product. We did, and the campaign drove sales of our existing products. That was a benefit we saw by already having a live product when we started.
Another major benefit is that it really unifies the company because it aligns everyone on the vision. Much of that is due to the landing page. But it also crystallizes the founders’ ideas into a clear path forward for the company. Before the crowdfund, everything was nebulous and different executives had varying visions about where we were going and what we were trying to achieve. But the crowdfund forced us to put our goals and benchmarks on paper and hold ourselves accountable to them, to do justice by our crowdfund community.
Q: A lot of founders are hesitant to share their financials prior to a community round. Was that a concern for you? If so, how did you overcome that?
A: We always planned to go public at some point. So, we understood early on the need for excellent documentation on the company, to have all our filings in line, and so forth. In many ways, going live on the Reg CF was like a Little League IPO. It has a lot of the light version of requirements you’d see for an IPO, like Form C filings and so on. So, it was a great exercise for us because it prepared us for what it’s like to go public. This was really a leg up to help us get to our long-term goal, as the process is very similar to a junior IPO.
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Q: What was the transition like going from ending your community round to preparing for your IPO?
A: Well, things are a little bit different for us as a tech company. Our focus is on tech hardware and software. The transition involved relentless R&D. What enabled us to go public was this critical mass of technology that we had built in the company…No one player dominates this emerging and contested field of tech hardware yet, but that’s what we’re trying to do. We’re competing against a lot of multibillion-dollar tech companies in this space.
After we raised the initial capital on StartEngine, we developed a significant upgrade to our core product line, the Lucyd Lyte® glasses…Though the revenue for a public company was not very high, the R&D we accomplished, the product development, and a few other things we did, helped kick off the IPO.
The initial community we built was instrumental in this whole process, providing product feedback and helping us get the product to a point where it could go fully mass market. Our newest models, which launched three months ago, are best in class, and this can be traced back to the initial product development through the crowdfund. Essentially, it allowed us to kickstart the R&D in a big way and develop this technology that gives us a unique competitive advantage.
Q: Could you expand on how the new model of the Lucyd glasses is differentiated from prior models? Were there any examples of input from your crowdfunding investors that drove the ultimate design?
A: Yes, absolutely. The model we launched after the crowdfund was groundbreaking. It was closer to a normal pair of glasses than any other smart eyewear on the market at the time. A couple of groundbreaking things about the Lyte 1.0 were that we achieved a one-ounce weight for the glasses, on par with traditional eyewear, and about seven hours of music playback per charge, which was longer than most other smart glasses. But the most significant improvement was the style upgrade – it was lighter and looked better than other smart glasses.
Feedback from our crowdfunders made it clear that people wanted smart glasses that look like trending styles in traditional eyewear. This informed our product’s style over the last few years. Our most popular product is just a black wayfarer. It looks good on men, women, young people, and older people. It’s a style that works well in the American market. Despite suggestions from my European team members for more avant-garde styles, I’ve found that Americans prefer simpler styles that go with every outfit.
This insight was born from the crowdfund where we essentially had a focus group of thousands of people at once. We put up a standard-looking aviator with smart features, and people were instantly interested. So, we manufactured it and brought it to market.
The crowd fund community greatly helped inform the product development. One of the biggest issues in smart eyewear is that most products are being designed by consumer electronics teams who know little about eyeglasses. A great pair of smart glasses starts with great optics. If you don’t have a good foundation, the product dies in the market.
Q: As a closing question, do you have any advice for first-timers in the space of crowdfunding?
A: Firstly, you have to be sure you want to do this because once you start, you have to go full bore. The whole team has to be on board and push it forward. Secondly, have a great product in the works, a great team, and a great story about how you’re different. Be willing to go the distance with your crowdfunders as they will want ongoing support and information about how things are going. Lastly, assess your resources before you start, as crowdfunding requires more resources than, say, Kickstarter. Have some energy and capital to get started, and with the right team, tech, and story, it should work out.
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*This testimonial may not be representative of the experience of other issuers and is not a guarantee of future performance or success.